Posts Tagged ‘assets’

Let’s take a look at Credit Union membership. Membership grew by only 500 members from 2009 -2010, the slowest growth in membership in decades. In a turbulent time when Banks are getting pummeled by the press, this administration, more regulation, more FDIC assessments and they are outpacing Credit Unions in growth!

Credit Union leadership…WAKE UP! Where is your marketing? Where is your vision? Where is the Trust? Where is your leadership? Complacency has taken over.  I heard one CEO tell me that he is Coasting, another one told me his Credit Union runs on Autopilot, another one waits three more years until retirement.

Who wants a Leader that is coasting especially in these tough times?

In this fast paced Social Media World, you are falling behind as I type this blog post. Quite frankly I’m not so sure you will be able to catch up. Sitting, waiting for all the lights to be on green???

LEAD or get someone who can.

Credit Union Asset Group Size by Members 2010

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The battle of survival rages on…

Credit Unions

The number of troubled credit unions remained about the same in January, NCUA CFO Mary Ann Woodson told the agency’s board today.

There were 369 CAMEL 4 and 5 credit unions at the end of January, compared with 368 at the end of December.

There were 1,819 CAMEL 3 credit unions at the end of January, compared with 1,827 at the end of December.

Last month, 5% of insured shares were in CAMEL 4 and 5 credit unions, compared with 5.08% in December. In January, 17.8% of all insured shares were in CAMEL 3 credit unions, compared with 18.1% in December.

The NCUSIF had a net income of $11.4 million last month, compared to a budgeted loss of $46.7 million. Its equity ratio was 1.28%, the same as in December, No credit unions closed so there was no insurance loss expense. The agency had budgeted $46.7 million. Since this report 5 credit unions have failed.

Banks

The number of distressed banks in the U.S. rose to 702 in the fourth quarter, the highest level in sixteen years, according to a report released by the Federal Deposit Insurance Corp. Tuesday. That number is up from 552 at the end of September and 416 at the end of June.

This is the largest number of banks on its “problem list” since June 1993. Banks insured by the FDIC dropped to a total quarterly profit of $914 million in the fourth quarter, compared with $2.8 billion in the third quarter. However, the result was significantly better than the $37.8 billion loss for insured institutions during the fourth quarter of 2008. Insured deposits reported full-year net income of $12.5 billion.

The FDIC reported that its Deposit Insurance Fund dropped further into negative territory, reporting a $20.9 billion loss in the fourth quarter, worse than its $8.2 billion loss in the third quarter.

The agency hopes to make up that loss through advance payments by banks of $45 billion in fees

Insurance Fund Ratios for Banks & Credit Unions

 

Total Assets Banks & Credit Unions

Average Institution Size Banks & Credit Unions

Banks & Credit Union Loan Chargeoffs

 

Chargeoffs are at record levels, and it appears the economy will linger for years.

Will this be the year chargeoffs level off or decline?

While the Credit Union mergers are getting bigger, what is happening to:

  • Asset size of the various Credit Union Groups?
  • Loan size of the various Credit Union Groups?
  • Membership of the various Credit Union Groups?

These are statistics as of the 3rd. Qtr. 2010. Large is considered >$100 Million in Assets. While most would consider this large, banks such as J.P. Morgan Chase, Wells Fargo have asset sizes larger than ALL Credit Unions Combined!

The larger credit unions control 86% of all the assets. Asset growth has been 21.6% since the beginning of 2006, and has slowed quite dramatically with these economic conditions. However you would think that with the bashing of the banks these past few years, that it would have been dramatically higher. Why Not?

Lack of leadership, marketing and branding. Social Media has now entered the arena, only to be embraced by most of the larger credit unions. The smaller credit unions have a great opportunity that they are wasting, and getting further and further behind.

The larger credit unions control 87.75% of all loans granted. Loan growth has been 12.31% since the beginning of 2006 and falling dramatically recently.

The larger credit unions control 78.89% of all membership. Membership has only grown 5.03% since 2006 in total.

What will the next 3-5 years look like for Credit Unions?

< $5 Mil $5-$20 $20-$100 > $100 Mil. Total
Total Assets $3,913 $23,423 $99,758 $792,900 $919,994
% of Total Assets 0.43% 2.55% 10.84% 86.19% 100.00%
Total Loans $1,951 $11,895 $56,361 $507,619 $577,826
% of Total Loans 0.34% 2.06% 9.75% 87.85% 100.00%
Total Members 1,117 4,321 13,988 72,593 92,019
% of Total Members 1.21% 4.70% 15.20% 78.89% 100.00%

The nation’s largest merger a $4.7 billion combination of Addison Avenue Federal Credit Union of Palo Alto Calif. and First Tech CU of Beaverton, Ore. has won final approval of First Tech members, it was announced Friday.

Credit Unions are merging at a rate of 3% per year over the past 4 years. There is basically 1000 less credit unions in September 2010, then there was at the beginning of 2006.

Are the big getting bigger?

  • 19% of the credit unions have an asset size greater than $100 million.
  • More than half of the credit unions have assets size less than $20 million.

With the current pressure from NCUA to garner more funds to keep the stabilization fund shored up, where does that leave the smaller credit union? Most are struggling to make a profit in today’s environment, only to be siphoned off to pay the fund to help support the corporates who invested in Mortgage backed securities. Where were the regulators?

Where do you see the trend going?

U.S. Credit Unions Asset Groups – Sep. 2010
Sep-10 2009 2008 2007 2006 <$5 Mil. $5-$20 Mil. $20-$100 Mil. >$100 Mil.
7,536 7,708 7,965 8,268 8,535 1,882 2,105 2,147 1,402
25% 28% 28% 19%

Bank profits totaled $14.5 billion in the three-month period that ended Sept. 30, a  decrease from $21.6 billion reported in the 2nd quarter, according to the FDIC. report. That is a 33% decline quarter over quarter.

U.S. banks posted their smallest profit since the fourth quarter of last year after one of the nation’s biggest lenders took a $10.4 billion writedown, the Federal Deposit Insurance Corp. said. Bank of America Corp.’s card services reported a $9.87 billion loss compared with a $955 million loss a year earlier because of a goodwill charge of $10.4 billion.

860 banks are listed as problem banks, those at great risk of failure, the highest number in 17 years. Asset size for these problem banks were listed at $379.2 billion according to FDIC.

“Credit performance has been improving, and we remain cautiously optimistic about the outlook,” FDIC Chairman Sheila Bair said in a statement. “It is too early for institutions to be reducing reserves without strong evidence of sustainable, improving loan performance and reduce loss rates.”

Loan-loss reserves declined for the first time since the fourth quarter of 2006, the FDIC said. Total reserves fell by $9.6 billion, as large banks reduced loan-loss provisions, the agency said.

The deficit at the agency’s deposit insurance fund narrowed to $8 billion during the third quarter from $15.2 billion.

While the deficit has narrowed, the burden of additional assessments is still impacting the smaller banks whose profits are being wiped out. That is probably why you are seeing a more orderly shutdown of bank which puts an additional financial burden on the FDIC deposit insurance.

Regulators Seized Four Banks, as 2010 Bank Failures Rise to 143 Surpassing 2009.

On Friday, State and Federal regulators closed four banks, as the total number of bank failures this year rise to 143, surpassing 2009 which saw a total of 140 bank failures amid the recession and mounting loan defaults. Assets of the four bank failures totaled $906.0 million. These bank failures are generally due to inadequate capital and mounting loan losses as defaults on commercial loans and residential mortgage loans continue to increase.

FDIC Failed Banks Closing Date of Failed Bank Deposits Transferred to Total Assets of Failed Bank Total Deposits of Failed Bank
First Vietnamese American Bank, Westminster, CA
November 05, 2010
Closed by California Department of Financial Institutions and FDIC appointed Receiver of this failed bank. To protect insured depositors, the FDIC entered into a purchase and assumption agreement with Grandpoint Bank, Los Angeles, California
$48.0 million
$47.0 million
Pierce Commercial Bank, Tacoma, WA
November 05, 2010
Closed by Washington Department of Financial Institutions and FDIC appointed Receiver of this failed bank. To protect insured depositors, the FDIC entered into a purchase and assumption agreement with Heritage Bank, Olympia, Washington
$221.1 million
$193.5 million
Western Commercial Bank, Woodland Hills, CA
November 05, 2010
Closed by California Department of Financial Institutions and FDIC appointed Receiver of this failed bank. To protect insured depositors, the FDIC entered into a purchase and assumption agreement with First California Bank, Westlake Village, California,
$98.6 million
$101.1 million
K Bank, Randallstown, MD
November 05, 2010
Closed by Maryland Office of Financial Regulation and FDIC appointed Receiver of this failed bank. To protect insured depositors, the FDIC entered into a purchase and assumption agreement with Manufacturers and Traders Trust Company (M&T Bank), Buffalo, New York
$538.3 million
$500.1 million

This was a busy Friday for the FDIC. Seven banks were closed by regulators on Friday, bringing the total number of U.S. bank failures for the year so far to 138. The Federal Deposit Insurance Corp. said the following banks were closed:

  • Scottsdale, Az.-based First Arizona Savings.
  • Jacksonville, Fla.-based First Bank of Jacksonville.
  • Tampa, Fla.-based Progress Bank of Florida.
  • Gordon, Ga.-based Gordon Bank; Barnesville.
  • Ga.-based First National Bank of Barnesville.
  • Maywood, Ill.-based First Suburban National Bank.
  • Overland Park, Kan.-based Hillcrest Bank were all closed.

The bank failures will cost the federal deposit-insurance fund a combined $445.2 million, the FDIC said.

For the vast majority of the 2010 banks closures, the FDIC has been able to find buyers who have assumed all deposits including those above the FDIC limit.

Bank Name City State CERT # Closing Date
First Arizona Savings, A FSB Scottsdale AZ 32582 22-Oct-10
Hillcrest Bank Overland Park KS 22173 22-Oct-10
First Suburban National Bank Maywood IL 16089 22-Oct-10
The First National Bank of Barnesville Barnesville GA 2119 22-Oct-10
The Gordon Bank Gordon GA 33904 22-Oct-10
Progress Bank of Florida Tampa FL 32251 22-Oct-10
First Bank of Jacksonville Jacksonville FL 27573 22-Oct-10